Shein's stock fell as much as 10% in Hong Kong, closing at HK$36.26, after New Zealand's Ministry of Business Innovation & Employment announced a recall of its contact lenses. The recall was prompted by the detection of Burkholderia cepacia complex, a bacterial contaminant that poses risks of eye infections. The Australian Competition and Consumer Commission also issued a similar recall.
This incident comes shortly after Shein's troubled market debut in Hong Kong, where its low-cost business model faces increasing scrutiny due to tariffs and regulatory changes in Europe and the U.S.
Analysts, including Marguerite LeRolland from Euromonitor International, suggest that Shein must evolve its value proposition beyond just low prices and novelty, focusing on improving its brand image and curating its marketplace offerings to address growing regulatory and public concerns